Deutsche Bank and BNP Paribas analysts say European Central Bank President Mario Draghi might disturb markets Thursday by delivering a more hawkish message than expected. At other major banks, analysts expect the ECB to stay the course, though a Citigroup strategist says Draghi could "perform his Jedi mind trick" to prevent market volatility.
As investors await Federal Reserve Chair Janet Yellen's expected announcement of a final interest-rate increase this year, they will be more interested in any hints on the pace of rate increases in 2018 and the central bank's forecast for how proposed tax cuts would affect the economy. "While the tax package is not a game changer, it does add more confidence that the Fed can keep going" with rate increases, said Brett Ryan, senior US economist at Deutsche Bank Securities.
US Trade Representative Robert Lighthizer denounced other members of the World Trade Organization at a ministerial meeting in Argentina for turning to litigation to pursue trade objectives. He said some countries believe they will "gain concessions through lawsuits that they could never get at the negotiating table."
The search for yield has revived UK securitisations, but the products are susceptible to volatility and are likely to be adversely affected by Brexit, experts say.
ED&F Man Capital Markets is benefiting from banks' decision to hold off on clearing bitcoin futures by signing 35 hedge funds, proprietary-trading firms and others and negotiating with at least six. The brokerage's Brooks Dudley says adding so many clients for one product is unusual.
The European Banking Federation plans to revise the European master agreement to align it more closely with recent legislation, such as the European Market Infrastructure Regulation, particularly regarding over-the-counter derivatives. Market participants and financial lawyers have been urging the update, saying Brexit particularly demands it.
The number of systematic internalisers will fall sharply once Europe's revised Markets in Financial Instruments Directive takes effect, says Patricia Shin, managing director of brokerage Kepler Cheuvreux. Shin predicts that a decline in research payments will prompt the demise of many registered SIs, which stand at more than 80, and that MiFID II will push trading away from dark pools into regulated markets.
The People's Bank of China has listed 40 online platforms for currency trading that might be operating illegally because they lack regulatory approval. The central bank has ordered nonbank payment services to stop handling transactions for the platforms.
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